Question of law versus fact under income tax reference proceedings: Tribunal-based findings prevented a reference to the High Court.

The Delhi HC held that a Revenue question framed under section 256(2) of the Income-tax Act was, in substance, a question of fact because it depended on the Tribunal's appreciation of evidence and findings on disputed additions. As no referable question of law arose, the statutory condition for directing a reference to the High Court was not met, and the reference petition was dismissed.

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Issues: Whether the question formulated by the Revenue under section 256(2) of the Income-tax Act, 1961 arose as a question of law fit to be referred to the High Court.

Analysis: The Revenue pressed only the first question for reference. The Court held that the question, though framed as one of law, was in substance a question of fact arising from the Tribunal's appreciation of the evidence and findings on the disputed additions. Since no referable question of law arose, the statutory requirement for directing a reference was not satisfied.

Conclusion: The question was held to be one of fact and not a question of law. The petition for reference was dismissed.

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